Historically, about 1 percent of Form 1040s are audited. Why does a Form 1040 reﬂecting $31,000 AGI and a standard deduction have much less than a 1 percent chance while a Form 1040 reﬂecting $912,800 AGI and $214,790 itemized deductions has a much greater than 1 percent chance of audit?
Answer to relevant QuestionsThe Green River, which is heavily polluted by industrial waste, flows through State S. Eighty-five companies operate manufacturing facilities that border the river. State S recently enacted legislation requiring each company ...Vitronix Corporation’s net worth exceeds $160 million, its stock is publicly traded, and a national CPA ﬁrm audits its ﬁnancial statements. Wilson Corporation’s net worth also exceeds $160 million. However, it is ...During the audit of Mr. and Mrs. Jessel’s 2012 and 2013 tax returns, the revenue agent learned that they kept two sets of books for their sole proprietorship. A comparison of the two revealed that Mr. and Mrs. Jessel ...Mr. and Mrs. Pratt failed to apply for an extension of time to ﬁle their 2014 Form 1040 and didn’t mail the return to the IRS until May 29, 2015. Assuming the Pratts had no excuse for ﬁling a delinquent return, compute ...Mr. JR’s tax situation for the year is very complicated. He engaged in several high-dollar investment transactions involving unresolved tax issues. He has instructed his accountant to take the most aggressive position ...
Post your question